Purpose of Payment/Benefit
The Age Pension is designed to provide income support to older Australians who need it, while encouraging pensioners to maximise their overall incomes. The Age Pension is paid to people who meet age and residency requirements, subject to a means test. Pension rates are indexed to ensure they keep pace with Australian price and wage increases.
Women born before 1949 have already qualified for the Age Pension. Women born in 1949 and beyond now qualify at age 65, the same as men.
The pension age for men and women born from 1 July 1952 will be gradually increased from 65 to 67 years as set out in the table below.
|Period within which a person was born||Pension age||Date pension age changes|
|From 1 July 1952 to 31 December 1953||65 years and 6 months||1 July 2017|
|From 1 January 1954 to 30 June 1955||66 years||1 July 2019|
|From 1 July 1955 to 31 December 1956||66 years and 6 months||1 July 2021|
|From 1 January 1957 onwards||67 years||1 July 2023|
To qualify for the Age Pension you must be an Australian resident (that is, living in Australia on a permanent basis) and in Australia on the day the claim is lodged, and must also satisfy one of the following:
- be an Australian resident for a total of at least 10 years, with at least five of these years in one period; or
- have a qualifying residence exemption; or
- be a woman who is widowed in Australia when both she and her late partner were Australian residents, and who has 104 weeks residence immediately before the claim; or
- be receiving Widow B Pension, Widow Allowance or Partner Allowance immediately before reaching pension age.
Special rules apply to residence in countries with which Australia has an International Social Security Agreement. Residence in these countries may count towards the minimum 10-year residence requirement.
Means Test Qualifications
The Age Pension is subject to an income test and an assets test. Pensioners are paid under the test that produces the lower rate of payment.
The social security system uses deeming to assess income from financial investments. Deeming rules provide a simple and fair way to assess income from financial investments for social security and Department of Veterans’ Affairs (DVA) pension and allowance purposes. From 1 January 2015, the deeming rules will be extended to include account-based income streams. To learn more about deeming and these changes visit the Deeming Information page.
The Work Bonus provides an incentive for pensioners over Age Pension age to participate in the workforce, should they choose to do so, by allowing them to keep more of their pension when they have earnings from working. Under the Work Bonus, the first $250 of fortnightly employment income is not assessed as income under the pension income test. Any unused amount of the fortnightly $250 Work Bonus will accumulate in a Work Bonus income bank, up to a maximum amount of $6,500.
The amount accumulated in the income bank can be used to offset future employment income that would otherwise be assessable under the pension income test.
The income bank amount is not time limited; if unused it carries forward, even across years.
For more information go to the Work Bonus factsheet.
Base pensions are indexed twice a year, on 20 March and 20 September, to reflect changes in pensioners’ costs of living and wage increases. The pension is increased to reflect growth in the Consumer Price Index and the Pensioner and Beneficiary Living Cost Index, whichever is higher. When wages grow more quickly than prices, the pension is increased to the wages benchmark. The wages benchmark sets the combined couple rate of pension at 41.76 per cent of Male Total Average Weekly Earnings. The single rate of pension is two-thirds of the couple rate.
For Age Pension rates refer to the Department of Human Services.
Most Age Pension payments are made by the Department of Human Services (DHS). Age pensioners who also receive certain compensation payments from the Department of Veterans' Affairs (DVA) have the choice of having their Age Pension paid by either DVA or DHS.
For further information about the Age Pension, please contact DHS on 13 2300 or visit the Age Pension section of the DHS website or if you are a veteran go to the Department of Veterans' Affairs website or phone 13 2300.